scm - international issues in scm

7/25/2019 SCM - International Issues in SCM

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International

Issues in SCM


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2

International Supply Chain

Management

Dispersed over a larger geographical area

Offers many more opportunities than justthe domestic supply chain

Risk factors are also present


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3

International Supply Chains International distribution systems

Manufacturing still occurs domestically, but distribution andtypically some marketing take place overseas. International suppliers

Raw materials and components are furnished by foreignsuppliers

Final assembly is performed domestically. In some cases, the final product is then shipped to foreignmarkets.

Offshore manufacturing

Product is typically sourced and manufactured in a singleforeign location

hipped back to domestic warehouses for sale anddistribution

Fully integrated global supply chain

Products are supplied, manufactured, and distributed fromvarious facilities located throughout the world.


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International Logistics

Logistics Costs comprise between 10% & 30% of thetotal landed costs of an International Order. Thus

International Logistics is a competiti!e tool

"ffecti!e International Logistics and #uppl$ Chainanagement can produce higher earnings and greaterCorporate "fficienc$


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International Logistics - Definition

International Logistics is design and management of a s$stem that controls the flow of materials into through

and out of the International Corporation

$ ta'ing a s$stems approach the Compan$ e(plicitl$recognises the lin'ages among the traditionall$ separate

logistics components within and outside the Corporation


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Difference between Domestic and

International Logistics

)istance

Currenc$ *luctuations

order + crossing ,rocess

Transportation odes

,ac'aging and Labelling re-uirements

Infrastructure

The Sixth Driver : Le!erage


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Availability of Modes

Ocean #hipping+ Liner #er!ice regularl$scheduled passage/ Tramp #er!ice a!ailable

for irregular routes and scheduled on demand/

Container #hips oll2on2oll2off OO/

ir #hipping


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Types of essels

Container #hips

oll + on +oll + off #hips

rea'bul' #hips

Combination #hips

Crude Carriers

)r$ bul' Carriers

4as Carriers


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"#

!ontainers

4eneral ,urpose Containers

eefer Containers

Tan' Containers

)r$ bul' Containers


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Pre-cooling

ContainersUsed at the farm level to

maintain Humidity and bring

down the temperature of the

product.


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Portable Storage on4!"eefer Containers


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"3

International Air Transportation

T$pes of ircrafts 5

,assenger ir ,lanes

ir freiters Cargo ,lanes

Combis

Charter ,lanes

"4


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"4

M"lti # modal Transportation

In!ol!es at least two different modes of transportation

6suall$ Ocean and Land ail oad/

6ses onl$ one #hipping )ocument ill of Lading + issued at the point of origin /

"5


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!"stom $o"se Agents %!$A&

The ole of gents bro'ers/ is the same worldwide

Clearing of 4oods through Customs

oo'ing of space for Ocean ir and Land freight

,ro!iding information to the clients

,reparation of Import "(port documents

endering *reight forwarding ser!ice

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'ac(aging for )xports

,rotecting the 4oods in transit from brea'ages

,rotecting the 4oods from water seapage

,rotecting 4oods from theft pilferage

"


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"

Transportation Doc"ments ill of Lading + fundamental #hipping document is a contract of carriage is a receipt for the goods is a certificate for title of 4oods

irwa$ ill + is a document that fulfils the same function

as an ocean ill of Lading howe!er it is non2 negotiable

,ac'ing List

Certificate from #hipping Compan$

Certificate of Origin

"!


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'ayment Systems 7ormal mode of pa$ment in International Trade

is through Letter of Credit 5

Letter of Credit + n arrangement whereb$ obligation to pa$ the "(porter is underta'en b$ a an'

The u$er8s an' issues a LC in fa!our of the #eller

T$pes of LC8s 5 e!o'able LC Irre!o'able LC

e!ol!ing LC


19/27McGraw-Hill/Irwin 2003 Simchi-Levi, Kaminsky, Simchi-Levi

Forces Driving

Globalization $lo%al &arket 'orces

(echnological 'orces

$lo%al )ost 'orces

*olitical and +conomic 'orces


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McGraw-Hill/Irwin 2003 Simchi-Levi, Kaminsky, Simchi-Levi

Global Market Forces

'oreign competition in local markets $ro,th in foreign demand

Domestic consumption from 4#- to .3#- of ,orldconsumption since "/#

'oreign sales fuel gro,th $lo%al presence as a defensive tool

0estle1s and ellogg1s *resence in stateoftheart markets

apan consumer electronics $ermany machine tools 7 81s


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Technological Forces

Diffusion of kno,ledge

&any high tech components developed overseas

0eed close relationships ,ith foreign suppliers 'or e9ample: )anon has !#- of laser engines

(echnology sharing;colla%orations

as cycles get shorter?

)lose to e9pertise >@ndian programmersA?


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Global Cost Forces

Bo, la%or cost Diminishing importance >)osts underestimated: %enefits

overestimated?

Other cost priorities @ntegrated supplier infrastructure >as suppliers %ecome

more involved in design? killed la%or

)apital intensive facilities ta9 %reaks joint ventures price %reaks cost sharing


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Political and conomic

Forces+9change rate fluctuations and operating

fle9i%ility

Regional trade agreements >+urope: 0orth*roductionprocesses designed to avoid tariffs?


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Political and conomic

Forces !rade protection mechanisms

(ariffs Cuotas

8oluntary e9port restrictions apanese automakers in

Bocal content reuirements (@;@ntel factories in +urope apanese automakers in the +

Eealth;environmental regulations apanese refused to import skis for many years >different sno,? $overnment procurement policies

p to 5#- advantage for


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!dded Comple"ities

u%stantial geographic distances


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!dded Comple"ities

+9change rate uncertainties

)ultural differences

accepted partnerships: styles value of punctuality

*olitical insta%ility ta9 rates government control


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#perational StrategiesTo !ddress These $isks

peculative trategy Iet on a single scenario

apanese auto manufacturing in apan Eedged trategy

Bosses in one area offset %y gains in another

8F in : IraJil: &e9ico: $ermany 'le9i%le trategy

scm - international issues in scm

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